We’ve been hearing about fraud in the insurance industry lately.  Do you remember way back in the distant past when the trusted insurance guy would come to your house and tell you which insurances were best for you?

Did it ever enter anyone’s head to suspect for one minute that the one he chose for you was the one that gave him the highest commission? Well, the insurance headlines are saying – look again.  The folks dealing in insurance aren’t quite the decent people they seem to be.

Don’t bank on it

Hearing about the insurance rip-offs got me looking at the bank frauds we heard about last year, especially the Ozzie ones, but NZ is right in there, especially as almost all our banks are owned by Australia.

Perhaps like me you have an image of the banks as being well-managed by upstanding people, pillars of the community in fact, and well-regulated by bureaucrats who keep a close watch on what they’re doing. Join me in the real world.  In fact, for years, borrowers were betrayed by regulators who failed to do any actual regulating.

In a bank in Australia you can have your superannuation nest egg plundered; you can have your home stolen via a dodgily-written mortgage contract; you can have your small business or farming enterprise shut down and all assets (critically, the family home) confiscated. These things are happening on a systematic basis.

Corruption

One bank had a system of bonuses and incentives that encouraged staff to engage in fraudulent lending, in another bank mortgage documents were falsified so that staff could meet targets and get bonuses; there was interest-rate rigging, money laundering, dishonest use of customers’ signatures, fees charged to people they knew were dead, bank staff taking cash as bribes for people to get a mortgage.

When you go to the bank to get advice on what to invest in, you don’t really think they’re going to push the particular products that earn a profit for the bank do you?  Well, that’s what’s been happening and to such a degree that banks are probably going to be obliged to sell their ownership of investment vehicles.  It’s hoped that’ll stop them ripping people off.

The never-ending story

That was last year – the banks.  Now it’s 2019 and we have the insurance industry being just as scummy and – worse – criminal.  Millions and millions of dollars are involved in both cases.

It’s beyond me why the whole lot of them aren’t rounded up and thrown in jail.  It’s not just that they’ve been working every trick in the book, it’s that they’ve destroyed totally my faith in our most respected institutions.  I mean – banks, insurance – where will it end!